Connect with us


Turkey’s interest rate policy fuels inflation




Inflation in Turkey soared last month, with the consumer price index (CPI) rising 36.1% year-on-year (YoY), from 21.3% in November. This sharp rise in inflation is largely attributable to the decision of the Central Bank of Turkey to gradually reduce the interest rate by 5% from September to December, despite fears of a rise in inflation following the high levels of government spending to support the economy during the Covid-19 pandemic. At the end of the third quarter (Q3) of 2021, the policy rate stood at 19%, and it had been lowered to 14% at the end of the fourth quarter (Q4).

Turkey also has a large current account deficit and is highly dependent on foreign capital inflows. The decision by central banks to cut rates has led to a fall in foreign demand for Turkish assets, including the lira, and has exacerbated Turkey’s current currency crisis. Due to this policy, the value of the lira fell by 33.5% quarter-on-quarter (QQ) against the US dollar in the fourth quarter of 2021. On December 20, President Recep Tayyip Erdogan, who influenced the decision of the central banks to cut rates, announced a plan to protect Turkish depositors against the volatility of the lira following the rapid depreciation of the currency in the fourth quarter of 2021. Following this announcement, the lira appreciated by 20, 7% against the US dollar and stabilized around TRY 13.6:1 USD in early January, signaling greater confidence in the currency and stabilization of the economy heading into the new year.

Despite this, President Erdogan remains committed to his policy of lower interest rates despite high and rising inflation, which puts the country at risk of persistent high inflation. Furthermore, President Erdogan’s insistence on having executive power over monetary policy could deter foreign investment on which the Turkish economy depends, increasing the risk of encountering hyperinflation. With the next general elections not scheduled before June 2023, uncertainty surrounding the Turkish economy is therefore likely to persist throughout this year.

The growth of the construction industry in Turkey had already started to slow down in the third quarter of 2021. This can be attributed to inflation in the prices of construction materials, which led to the postponement of major development projects in the country. Overall, the industry grew only 2.7% YoY in 2021 after a 5.5% YoY reduction in 2020, reflecting weak performance compared to previous forecasts. Further rate cuts by the Central Bank of Turkey this year could undermine confidence in the lira and cause building material costs to rise even further, causing the construction sector to grow at a slower pace than expected. At present, the industry is expected to grow by 2.8% this year, but this forecast could be revised downwards if inflation continues to rise with even higher material costs.

Content from our partners
Privacy glazing: how the latest interactive app transforms the user experience

Sun protection: how to improve well-being and productivity in the post-COVID workplace

Sustainable switchable glass: future technology for today's buildings




The mention sources can contact us to remove/changing this article

What Are The Main Benefits Of Comparing Car Insurance Quotes Online

LOS ANGELES, CA / ACCESSWIRE / June 24, 2020, / Compare-autoinsurance.Org has launched a new blog post that presents the main benefits of comparing multiple car insurance quotes. For more info and free online quotes, please visit https://compare-autoinsurance.Org/the-advantages-of-comparing-prices-with-car-insurance-quotes-online/ The modern society has numerous technological advantages. One important advantage is the speed at which information is sent and received. With the help of the internet, the shopping habits of many persons have drastically changed. The car insurance industry hasn't remained untouched by these changes. On the internet, drivers can compare insurance prices and find out which sellers have the best offers. View photos The advantages of comparing online car insurance quotes are the following: Online quotes can be obtained from anywhere and at any time. Unlike physical insurance agencies, websites don't have a specific schedule and they are available at any time. Drivers that have busy working schedules, can compare quotes from anywhere and at any time, even at midnight. Multiple choices. Almost all insurance providers, no matter if they are well-known brands or just local insurers, have an online presence. Online quotes will allow policyholders the chance to discover multiple insurance companies and check their prices. Drivers are no longer required to get quotes from just a few known insurance companies. Also, local and regional insurers can provide lower insurance rates for the same services. Accurate insurance estimates. Online quotes can only be accurate if the customers provide accurate and real info about their car models and driving history. Lying about past driving incidents can make the price estimates to be lower, but when dealing with an insurance company lying to them is useless. Usually, insurance companies will do research about a potential customer before granting him coverage. Online quotes can be sorted easily. Although drivers are recommended to not choose a policy just based on its price, drivers can easily sort quotes by insurance price. Using brokerage websites will allow drivers to get quotes from multiple insurers, thus making the comparison faster and easier. For additional info, money-saving tips, and free car insurance quotes, visit https://compare-autoinsurance.Org/ Compare-autoinsurance.Org is an online provider of life, home, health, and auto insurance quotes. This website is unique because it does not simply stick to one kind of insurance provider, but brings the clients the best deals from many different online insurance carriers. In this way, clients have access to offers from multiple carriers all in one place: this website. On this site, customers have access to quotes for insurance plans from various agencies, such as local or nationwide agencies, brand names insurance companies, etc. "Online quotes can easily help drivers obtain better car insurance deals. All they have to do is to complete an online form with accurate and real info, then compare prices", said Russell Rabichev, Marketing Director of Internet Marketing Company. CONTACT: Company Name: Internet Marketing CompanyPerson for contact Name: Gurgu CPhone Number: (818) 359-3898Email: [email protected]: https://compare-autoinsurance.Org/ SOURCE: Compare-autoinsurance.Org View source version on accesswire.Com:https://www.Accesswire.Com/595055/What-Are-The-Main-Benefits-Of-Comparing-Car-Insurance-Quotes-Online View photos


to request, modification Contact us at Here or [email protected]